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Block (SQ) Stock Sinks As Market Gains: What You Should Know

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Block (SQ - Free Report) closed at $135.06 in the latest trading session, marking a -0.25% move from the prior day. This change lagged the S&P 500's 1.43% gain on the day. Elsewhere, the Dow gained 1.02%, while the tech-heavy Nasdaq added 0.32%.

Prior to today's trading, shares of the mobile payments services provider had gained 52.62% over the past month. This has outpaced the Business Services sector's gain of 3.91% and the S&P 500's gain of 5.65% in that time.

Investors will be hoping for strength from Block as it approaches its next earnings release. On that day, Block is projected to report earnings of $0.17 per share, which would represent a year-over-year decline of 58.54%. Our most recent consensus estimate is calling for quarterly revenue of $4.24 billion, down 16.1% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.09 per share and revenue of $18.91 billion, which would represent changes of -36.26% and +7.04%, respectively, from the prior year.

Any recent changes to analyst estimates for Block should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 115.25% lower. Block is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note Block's current valuation metrics, including its Forward P/E ratio of 124.64. This represents a premium compared to its industry's average Forward P/E of 22.3.

It is also worth noting that SQ currently has a PEG ratio of 5.89. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Technology Services industry currently had an average PEG ratio of 2.29 as of yesterday's close.

The Technology Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 170, which puts it in the bottom 34% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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